This document is a marketing proposal for Bikemate, which is a new brand of smart accessories for active mobility devise (AMD) users that seeks to improve the navigation capabilities of cyclists who are using power-assisted bicycles (PAB) in Singapore. The product will contain some of the latest interactive navigational features for improved functionality (a detailed description of the product design is provided in appendix 1) (Katz, 2020). Bikemate is set to be introduced into the Singaporean market to shorten the commute time for cyclists between one location and other by exploiting data analytical capabilities. Key sections of this report will describe the proposed market segmentation strategy, a differentiation plan as well as promotion, price, and place approaches.
Market Segmentation Strategy
The aim of conducting a market segmentation strategy is to identify a group of consumers that would be best served by a product or service. In line with this statement, market segmentation strategies have been associated with the process of apportioning markets into different clusters of people, based on their socioeconomic characteristics (Ernst and Dolnicar, 2018; Jang, Rasouli and Timmermans, 2018: Ibrahim et al., 2018: Haan et al., 2018: White, Habib and Hardisty, 2019; Gai and Klesse, 2019; Tkaczynski, Rundle-Thiele and Prebensen, 2018). This segmentation strategy makes it easier for marketers to customize their products and services according to the unique characteristics of known groups of customers (van Everdingen, Hariharan and Stremersch, 2019: Aşan and Emeksiz, 2018: Li et al., 2020). The market segmentation strategy for Bikemate, which is outlined in this report is designed with this goal in mind.
The market for Bikemate in Singapore is characterized by varying socioeconomic dynamics as explained above. In other words, people who use PABs have varying demographic characteristics. Current market trends show that recreational cycling is a popular activity among some residents, while others use bicycles to conduct important businesses and commute between their homes and workplaces (Szubski, 2020; Barnfield and Plyushteva, 2016). Based on these varied characteristics, the target market for Bikemate will be divided into two sections. The first one will be comprised of individual customers who are people that buy PABs for their own domestic use. The second one will be made up of business clients, who typically include local companies that provide delivery services using bicycles, such as restaurants, parcel delivery firms, bicycle renting companies, and online retail establishments (Yusof, 2019: Huseynov and Özkan Yıldırım, 2019; Park et al., 2018; Prideaux, Lee and Tsang, 2018: Loo and Leung, 2018). The justification for segmenting the market into the two categories described above is to exploit the opportunities that exist in the growing cycling culture within Singapore and cut the cost and time associated with completing deliveries.
Cognizant of the need to use existing market opportunities to make a successful product launch, it is important to understand the unique characteristics of the two market segments identified above, which will form the basis for the development of other marketing elements, such as price and location. For example, individual and corporate clients have different purchasing powers and motivations for buying Bikemate. For example, corporate clients have more purchasing power than individual customers do when buying PABs because they have more financial resources at their disposal to make a purchase compared to a typical customer who, probably, depends on personal savings to finance their purchases.
Individual buyers also have unique advantages that separate them from their corporate counterparts. For example, they are more likely to experiment with new products as opposed to their corporate counterparts because they can make independent decisions much faster than an organization can. Nonetheless, the two market segments have a common underlying attribute that make them appealing to this marketing plan – the desire for efficiency in transport (Arrondo, Garcia and Gonzalez, 2018). Stated differently, both corporate and individual clients share a desire to complete their trips efficiently. The new brand of smart accessories for active mobility devises will contribute towards the achievement of this goal. Therefore, the marketing strategy will involve communicating this same message to the two customer groups using a variation of different place, price and promotion strategies.
Promotion is an important segment of the marketing mix plan because it outlines how customers will be made aware of the new product. In this regard, the promotion strategies adopted by most companies are linked to advertisement techniques used by companies to advertise or sell their products (Massiera, Trinchera and Russolillo, 2018: Vrontis and Christofi, 2020: Babah Daouda, Barth and Ingenbleek, 2020). To support this objective, different companies use unique promotion strategies that appeal to their internal and external market dynamics. Some of the most common promotion strategies adopted by marketers include cold calling, loyalty and reward programs, television advertising, print media, radio advertisements among others (Morgan, Feng and Whitler, 2018: Watson et al., 2018: Rubio, Villaseñor and Oubiña, 2015). Digital media is a relatively underused promotion strategy that will be used to market Bikemate.
Digital marketing comprises of different types of electronic media, including email marketing, social media, blogging, e-newsletters, and websites (Kumar, 2018b; Eckhardt et al., 2019: Donnelly et al., 2015; Makrides, Vrontis and Christofi, 2020: Scolere, Pruchniewska and Duffy, 2018). The justification for using digital media as the main promotion strategy for Bikemate is premised on its inexpensive nature and ability to reach many people (Schwemmer and Ziewiecki, 2018; Darmody and Zwick, 2020; Crittenden and Peterson, 2019a: Crittenden and Peterson, 2019b; Goyal, 2017). Furthermore, since Bikemate is a tech product, digital marketing augments as a natural promotion strategy.
Changes in the digital media environment have seen companies adopt unique marketing strategies that suit the characteristics of varied media platforms. These changes have led to different sales outcomes as some digital marketing strategies become more effective than others because of differences in the implementation of promotion strategies (Gutiérrez-Cillán, Camarero-Izquierdo and José-Cabezudo, 2017; Eryandra, Sjabadhyni and Mustika, 2018; Castaldi and Giarratana, 2018; Fernandez-Lores et al., 2016). For example, social media is emerging as an effective media platform for marketing new products at the expense of other digital marketing platforms, such as email marketing and e-newsletters, which are dwindling in popularity and effectiveness because of their non-interactive nature (Crittenden and Crittenden, 2015a; Crittenden and Crittenden, 2015b; Barroso-Méndez, Galera-Casquet and Valero-Amaro, 2015; Perren and Kozinets, 2018). Consequently, more interactive digital marketing platforms are becoming more accepted in the market.
Stemming from this trend, social media marketing is the most viable promotion plan for Bikemate because it offers real-time engagement opportunities with customers (Bossetta, 2018; Spais, Beheshti and Rana, 2019). Additionally, there is a broader trend among small and medium enterprises to keep up with technological changes by adopting virtual-based marketing communication strategies (Hoffjann, 2018: Trinh and Begun, 2019). This trend explains why many companies are transitioning their brick and mortar businesses to the digital platform (Li et al., 2020). The proposed promotion strategy for Bikemate will tap into this trend.
Word-of-mouth will also be used as a complementary promotion plan for Bikemate because the buzz generated by the social media strategy will also be reflected though increased discussions among customers about the product. Therefore, part of the promotion strategy is contingent on people sharing their experiences after using Bikemate. These conversations are likely to generate interest at the grass root level, as opposed to other forms of promotion, such as television, which have a top-down information structure. Overall, the use of the digital marketing plan is critical to the implementation of this promotion strategy because it offers unique advantages to Bikemate, such as the creation of valuable data, which would be difficult to obtain using other techniques. The digital marketing strategy also offers marketers sophisticated analytical tools to dissect data, which could be further used to improve the marketing plan.
A place strategy refers to how a company intends to avail its products to its customers. Researchers associate this marketing plan with a firm’s distribution strategy because it outlines the infrastructure that will be used to deliver products or services to customers (Bhandari and Bansal, 2018). Their findings have also shown that most place strategies are based on the need to exploit existing direct selling opportunities and exclusive distribution advantages to expand market coverage (Le Breton-Miller and Miller, 2018). Therefore, a robust place strategy should exploit some of these benefits.
Bikemate’s place strategy will be based on online delivery because it is an inexpensive way of availing the product to the target market. Furthermore, it is assumed that the two main target market segments for the product (individual and corporate clients) are tech-savvy and can be reached online. The main advantage of this place strategy is its ability to reach many groups of customers using a low-cost framework. Reports also suggest that markets are increasingly becoming digital as technological innovation continues to reshape modern life (Raffaelli, 2019; Morgado, 2018; Kim and Kumar, 2018; Wang, Qin and Xu, 2019). Relative to this observation, Gilardi et al. (2018) say that the relevance of digital marketing to today’s online distribution systems has significantly increased because of the advantages of operating a distribution system highlighted above. Furthermore, online infrastructures are exempt from some of the physical limitations of brick-and-mortar distribution strategies.
The place strategy for Bikemate will play an important role in the company’s overall marketing plan because it outlines how customers can get the product. This tenet of the marketing plan is essential in operationalizing the broader market segmentation strategy identified earlier in this report because the two market segments (individual and corporate customers) can access the product virtually. Subject to the need to reach these target markets, the place strategy will be based on the growth of the digital supply chain system that exists in Singapore, which has been used to avail millions product to customers spread across nearly every corner of the country. Therefore, the advanced logistical capabilities for delivering products that are available in Singapore will make it possible to serve customers in any part of the country.
The pricing strategy for Bikemate is an important attribute of its overall marketing plan because it communicates the product value to potential customers. Price refers to the amount of money consumers would be willing to pay to purchase a product or service (O’May et al., 2016; O’Connor, 2018). A typical pricing strategy should reflect the effects of varied market attributes, such as purchasing power parity, cost of production, and competitors’ actions on purchasing decisions (Skiera, Schlereth and Oetzel, 2019: Jin et al., 2019; Muñoz and Cohen, 2018; Valencia-Herrera and López-Herrera, 2018). Based on this need, marketers have come up with different models for determining the price of a good or service (McDonald and Eisenhardt, 2020; Ghosh, 2018; Peric, Durkin and Vitezic, 2017). The first one is premium pricing, which targets high-income clients. The second model is penetration pricing, which is based on the need to increase awareness about a product or service to customers (Blankson, Cowan and Darley, 2018; Borodako, Berbeka and Rudnicki, 2015). This type of pricing structure is usually adopted for novel products in the market. The impact of competitors’ actions are also negligible when setting prices using this model.
The third pricing model is the economy framework, which typically targets price-conscious customers such as middle or low-income buyers. It has been used as the preferred pricing strategy for selling products in high volumes. Lastly, marketers can use a price skimming strategy to sells goods and services based on the maximum amount of money they can charge for them. Different researchers have proposed alternative pricing models, such as the cost-based or value-based pricing frameworks, but the aforementioned models are the most commonly used by marketers around the world and appear in studies such as those of López-Cabarcos, Göttling-Oliveira-Monteiro and Vázquez-Rodríguez (2015). The premium pricing model will be adopted for Bikemate based on the unique characteristics of its potential customers and the product’s impact on the Singapore market.
The justification for its selection is predicated on the niche characteristics of consumers (individual and corporate) in the two market segments identified in this report. For example, potential individual customers who use AMD in Singapore are mostly expatriates. They are a niche group of customers that form a small segment of PAB buyers in the country. They are also less sensitive to price considerations than the general population (Kalverkamp and Raabe, 2018). Therefore, a premium-pricing model work for them. This pricing model will also improve the Bikemate’s image in the market because it will be associated with luxury and quality. Relative to this assertion, Garay Tamajón and Morales Pérez (2020) say that a premium-pricing model is often linked to a favorable brand image in the minds of customers. To explain this link, Newbery et al. (2016) say that a premium pricing model exploits the commonly held belief that expensive products are of higher quality and distinction compared to their substitutes. Competitors use this pricing strategy to increase their profitability, especially when clients are willing to pay high prices (Chaudhuri, 2017; Walker, Milne and Weinberg, 2019; Georgallis and Lee, 2020; Finch, Geiger and Harkness, 2017). Certain market conditions enable this practice to occur, including the presence of few, or no, substitute products in the market and the existence of low barriers to entry in a market.
The proposed premium pricing strategy is consistent with the brand positioning plan identified in this report, which seeks to present Bikemate as a lifestyle brand that caters to the needs of discerning residents of Singapore who are environmentally conscious and socially responsible. The projected sales numbers associated with this pricing model is provided in Appendix 2. Therefore, by using the premium pricing model alone, Bikemate may be perceived as a lifestyle brand and an ostentatious product to have (Nagarajan and Kumar, 2015: Lim et al., 2016; Nagar, 2016). This image will contribute to the development of a positive brand image for the company.
Positioning and Differentiation Strategy
A well designed positioning and differentiation strategy is an important tenet of a marketing mix plan because it impacts how people will view a product or service. In this regard, researchers link effective positioning strategies with the ability to influence consumer perception (Paddock, 2016: Castejón and Zancajo, 2015; Holzinger and Tosun, 2019:). Consistent with the views of Kumar, Rahman and Kazmi (2016) in their assessment of market positioning strategies Bikemate will be positioned as a lifestyle brand that caters to the needs of Singaporean residents who are environmentally conscious and socially responsible. This positioning strategy aligns with the current trend in Singapore where residents are choosing to leave their cars at home and cycle to work.
A report by the Singaporean Ministry of Transport. (2019) shows that cycling has become increasingly popular as an accepted mode of transport. Consequently, the number of people using PMDs is growing annually as more people embrace environmental sustainability and positive living as new norms (Hart, Sharma and Halme, 2016; Gunderson, Stuart and Petersen, 2018). Therefore, using Bikemate to improve users’ cycling experiences presents an opportunity to tap into the growing movement for better environmental accountability (Dinnie, 2018: Müller, 2018; Gürhan-Canli, Sarial-Abi and Hayran, 2018; Krause, 2015). The Singaporean government has recognized this fact and instituted programs, such as the “Walk Cycle Ride SG vision”, to encourage residents to use better and efficient modes of travel (Abdullah, 2018). Such programs are expected to improve the uptake of power-assisted bicycles.
The proposed positioning and differentiation strategy is designed to create a favorable brand positioning in the mind of the target market. To support this statement, researchers say that positioning and differentiation strategies should be designed to have a positive appeal in the minds of customers (Malik, Sudhakar and Dutta, 2018; López-Cabarcos, Göttling-Oliveira-Monteiro and Vázquez-Rodríguez, 2015: Hirvonen, 2016: Al Badi, 2018). For example, marketers can use a differentiation strategy to create a competitive edge over rivals or to provide unique value propositions to their customers (Kumar, 2018a: Trinh and Begun, 2019; Tsoukas, 2018: Maritan and Lee, 2017: Souza, A. et al., 2020: Mellahi et al., 2016: Wilbanks, 2016: Wenzel et al., 2020: Hikida and Lee, 2018: Morton, Stacey and Mohn, 2018). Overall, Bikemate will be positioned as a lifestyle brand that caters to the needs of Singaporean residents who are environmentally conscious and socially responsible.
This document has outlined a marketing plan for Bikemate, which is a new brand of smart accessories for AMD users that seeks to improve the navigation capabilities of cyclists who are using PAB in Singapore. The marketing mix strategy highlighted in this report should help to market the new product and popularize the concept of smart accessories for AMD users to the Singapore market without much hiccups. The product, place, price and positioning strategies are all interconnected through a digital marketing network that links potential customers with the innovative product. This is the basis for the use of the digital distribution and marketing plans. If well implemented, this marketing proposal will be useful in developing a successful product launch for Bikemate in the Singaporean market.
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Appendix 1: Design of Smart Accessory
Product design is one of the most important attributes of a company’s marketing strategy. It appeals to customers’ emotions as well as their need for functional support. This aspect of marketing has been associated with imagery and creativity using innovative processes that seek to merge aesthetic features with functional communication capabilities of digital analytics. Bikemate should be developed with this goal in mind because its design needs to communicate a strong brand value that is premised on promoting a good aesthetical appeal and advancing functional properties to aid in navigation. To this end, key design features relating to the smart accessory will focus on aesthetics, power consumption and functionality. These areas of assessment are outlined in the table below.
|Aesthetics||The aesthetic attributes of Bikemate need to reflect functionality and visual appeal. The functionality component of the design plan relates to the process of beaming information on a screen attached to the helmet, which will allows users to read important navigational information, while cycling on the road. Figure 1 below highlights how the screen placement should be done. |
According to figure 1 above, the visual cues conveyed to the user will be shown in front of the user’s face as demonstrated above. The screen’s design and attachment to the helmet will be presented in the format used in a bug mask. In other words, it will be placed above and behind the helmet brim. The screen can be made from various affordable materials, but a flexible fiberglass would be ideal. It can also be porous to allow for minimal ventilation because there is need for air circulation when cycling. Furthermore, the helmet and screen design are aerodynamic to aid in movement while cycling because there should be minimal distraction from wind patterns during motion. The helmet will be secured on the cyclist’s face using a strap fastened on the chin. This is to make sure that there is little movement of the protective device during motion.
|Functionality||The proposed product will be visible to the user through augmented reality features, which entails equipping the helmet with visual projection features that allow cyclists to monitor virtual data in real time without compromising their control of the PAB. Only important information, such as directional cues, will be displayed on the augmented reality screen as too much information may distract the user. Stated differently, only essential information will be projected on the screens. Lately, there has been contention regarding what constitutes “essential information” and it is our position that directional cues (as highlighted above), distance projections, and landmarks should form the main inclusion criteria for defining important information. This metric of information review is proposed as an underlying pillar of information inclusion because it provides primary navigational data for users. |
Another functional area for the devise is sound reception. While it has been proposed that a sound devise be integrated in the helmets’ design to provide additional navigation information to the user, concern has been raised regarding the ability of this feature to block out environmental stimuli, which is essential for the safe use of PABs. To address this problem, bone-conduction headphones are proposed for use because they could provide users with vital sound cues for navigation without “drowning out” environmental stimuli (Katz, 2020). This type of device will not be worn over the helmet but, rather, it will rest on the cheekbones, thereby providing more room for head movement when cycling. Unlike other headphones, the bone-conduction headphones will not seal the user’s ear canal because there needs to be room to receive vital information about environmental stimuli. Therefore, the product’s features should be integrated in the helmet without much concern for how it will be positioned on the user’s body.
|Power||Bikemate is designed to remotely improve functionality in the use of PAB. Therefore, it requires a steady power supply. To serve this purpose, the product’s design will contain a wireless charging devise that will be attached to the helmet. Although it has been proposed that a small solar panel could be integrated on the helmet’s design, such an undertaking would significantly increase the cost of production for installing additional panels. Consequently, there could be a spike in cases of production inefficiencies as few manufacturers in the region have the capability to develop such a helmet on a mass scale. Proposals have also been made to charge the new brand of smart accessory with kinetic power but this suggestion creates a new risk area in the product design and utility process because it causes an artificially high dependence on weather conditions for optimum functionality, which should not be the case. However, future design improvements could accommodate such changes to the helmet’s design to include kinetic charging as a supplementary energy source.|
Appendix 2 Projected Sales
The table below presents a 1-year sales forecast for Bikemate
|Sales Forecast Year 1|
|Prepared By:||Company Name:|
|Complete This Chart First:|
|Product Lines||Units||Sales Price Per Unit||COGS Per Unit||Margin Per Unit|
|IC1||1000||$ 200.00||$ 100.00||$ 100.00|
|IC2||1600||$ 220.00||$ 110.00||$ 110.00|
|IC3||1200||$ 190.00||$ 50.00||$ 140.00|
|CC1||10000||$ 2,000.00||$ 1,000.00||$ 1,000.00|
|CC2||19000||$ 1,500.00||$ 750.00||$ 750.00|
|CC3||17000||$ 1,750.00||$ 950.00||$ 800.00|
|Product Lines||Month 1||Month 2||Month 3||Month 4||Month 5||Month 6||Month 7||Month 8||Month 9||Month 10||Month 11||Month 12||Annual Totals||Category Breakdown||Category / Total|
|Total Sales||16,000||16,000||17,000||16,100||16,900||16,700||16,000||15,000||17,000||18,000||14,000||21,300||$ 200,000||100.0%||0.2%|
|Total COGS||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||$ 120,000||60.0%||0.2%|
|Total Margin||6,000||6,000||7,000||6,100||6,900||6,700||6,000||5,000||7,000||8,000||4,000||11,300||$ 80,000||40.0%||0.2%|
|Total Sales||1,600,000||1,400,000||1,800,000||1,600,000||1,600,000||2,000,000||1,800,000||1,700,000||1,600,000||1,500,000||1,400,000||1,300,000||$ 19,300,000||100.0%||20.2%|
|Total COGS||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||1,000,000||$ 12,000,000||62.2%||23.2%|
|Total Sales||19,000||19,000||19,000||19,000||19,000||21,000||16,000||19,000||19,000||19,000||19,000||19,000||$ 227,000||100.0%||0.2%|
|Total COGS||10,000||10,000||20,000||–||10,000||10,000||10,000||10,000||10,000||10,000||10,000||10,000||$ 120,000||52.9%||0.2%|
|Total Sales||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||1,600,000||$ 19,200,000||100.0%||20.1%|
|Total COGS||883,000||883,000||883,000||883,000||883,000||883,000||883,000||883,000||883,000||883,000||883,000||883,000||$ 10,596,000||55.2%||20.5%|
|Total Sales||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||2,300,000||$ 27,600,000||100.0%||29.0%|
|Total COGS||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||1,100,000||$ 13,200,000||47.8%||25.6%|
|Total Sales||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||2,400,000||$ 28,800,000||100.0%||30.2%|
|Total COGS||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||1,300,000||$ 15,600,000||54.2%||30.2%|
|Total Units Sold||0||0||0||0||0||0||0||0||0||0||0||0||0|
|Total Sales||$ 7,935,000||$ 7,735,000||$ 8,136,000||$ 7,935,100||#########||#########||#########||#########||$ 7,936,000||#########||$ 7,733,000||$ 7,640,300||$ 95,327,000|
|Total Cost of Goods Sold||$ 4,303,000||$ 4,303,000||$ 4,313,000||$ 4,293,000||#########||#########||#########||#########||$ 4,303,000||#########||$ 4,303,000||$ 4,303,000||$ 51,636,000|
|Total Margin||$ 3,632,000||$ 3,432,000||$ 3,823,000||$ 3,642,100||#########||#########||#########||#########||$ 3,633,000||#########||$ 3,430,000||$ 3,337,300||$ 43,691,000|
IC1 – Individual Customer 1
IC2 – Individual Customer 1
IC3 – Individual Customer 1
CC1: Corporate Customer 1
CC2: Corporate Customer 1
CC3: Corporate Customer 1